Exclusive: With Roman law doctrine, India moves to stub out tobacco industry rights

31 January 2018:

NEW DELHI (Reuters) – The Indian government is pushing the Supreme Court to apply a rarely used doctrine that would strip the $11 billion tobacco industry’s legal right to trade, an effort aimed at deterring tobacco companies from challenging tough new regulations.

New Delhi has for the first time asked the top court to classify tobacco as “res extra commercium”, a Latin phrase meaning “outside commerce,” according to a Reuters review of previously unreported court filing by the Health Ministry on Jan. 8.

If applied, the doctrine – which harkens back to Roman law – would have far reaching implications: in denying an industry’s legal standing to trade, it gives authorities more leeway to impose restrictions.

For example, the Supreme Court’s application of the doctrine to alcohol in the 1970s paved the way for at least two Indian states to ban it completely and allowed courts to take a stricter stance while regulating liquor – something constitutional law experts say could happen with tobacco if a similar ruling was made.

“The effects of tobacco are much more than even alcohol … It will be a fillip to this drive against tobacco,” said government lawyer R. Balasubramanian, who is acting on behalf of the Ministry of Health in pursuing the designation.

Balasubramanian, however, said the government is not discussing banning tobacco and the goal of invoking the Roman law doctrine was only to curtail the industry’s legal rights.

CURBS AND RESTRICTIONS

With an aim to curb tobacco consumption – which kills more than 900,000 people each year in India – the government has in recent years raised tobacco taxes, started smoking cessation campaigns and introduced laws requiring covering most of the package in health warnings.

But a court in southern Karnataka state last month quashed those labeling rules after the tobacco industry successfully argued the measure was “unreasonable” and violated its right to trade.

The government this month appealed the ruling in the Supreme Court which put on hold the Karnataka court order. The top court will next hear the case on March 12.

In its filing, the government included “res extra commercium” because it wants to stop the industry from pursuing such arguments again, said Balasubramanian.

Seeking to apply the doctrine to tobacco, the government argued it should have the power “to regulate business and to mitigate evils” to safeguard public health, the court filing showed.

Sajan Poovayya, a senior lawyer representing top Indian cigarette maker ITC Ltd (ITC.NS) and Philip Morris International Inc’s (PM.N) Indian partner, Godfrey Phillips (GDFR.NS), said the industry’s legal rights would be severely limited if the court applies the doctrine to tobacco.

Poovayya said he would fight the government’s argument “tooth and nail” and make a case that taking away the industry’s right to trade would imperil millions of Indian farmers who depend on tobacco for their living. The industry estimates 45.7 million people in India depend on tobacco for their living.

“India is a tobacco growing country and there’s a need to look at the interest of those people who are already in the sector,” Poovayya said.

“Tobacco is not destructive to health. If tobacco is, sugar is as well.”

ITC and Godfrey Phillips, as well as India’s health ministry, did not respond to requests for comment.

SET A PRECEDENT

India’s tobacco labeling rules, which mandate 85 percent of a cigarette pack’s surface be covered in health warnings, have been a sticking point between the government and the tobacco industry since they were enforced in 2016.

That year, the industry briefly shut factories across the country in protest and filed dozens of legal cases challenging the rules.

The federal health ministry says stringent health warnings on packages help reduce consumption of tobacco by making people aware of its ill-effects. A government survey last year found 62 percent of cigarette smokers thought of quitting because of warning labels on the packets.

Mary Assunta, a long-time tobacco control advocate and a senior policy advisor at the Southeast Asia Tobacco Control Alliance, said she had never heard of a country applying the “res extra commercium” doctrine to tobacco, but hoped India would set a precedent.

“Such a classification will help protect tobacco control measures from being challenged, particularly for developing countries where the bulk of the smokers are,” Assunta said.

The doctrine would open the door to an outright ban on tobacco sales if a state so wished, said Pratibha Jain, a partner at law firm Nishith Desai Associates and a specialist in Indian constitutional law.

“It gives the state autonomy to completely ban trade in tobacco,” Jain said. “It gives governments the constitutional cover that will protect future litigation. The industry will lose significant ground as your protection of right to trade is gone.”